The mRNA vaccines for COVID-19, developed by Moderna and BioNTech/Pfizer, were a conspicuous bright spot in a generally devastating year. Besides giving us a chance to bring the pandemic to an end, they remind us more generally of the profoundly transformative potential of emerging technologies.
Audacious scientific and entrepreneurial ambitions can take years of grinding persistence, often sounding unrealistic or absurd to outsiders along the way, before suddenly they become generally accepted wisdom.
Moderna’s stock, which IPO’d at $23 a share in December 2018 and struggled to maintain this level in 2019, now sits at north of $100. The company was valued at $7.5 billion at the time of its IPO. Many considered the valuation staggering at the time. As MarketWatch reported, “no mRNA-based drug has ever been approved by the FDA nor any other regulatory agency, so it will be years before Moderna will be able to bring anything to market.”
Three years later, the company is now valued at over $40 billion.
It took a solid decade of sweat and capital before Moderna could truly take flight. As Crunchbase notes, 10 years earlier, “it was just a concept-stage company in the earliest stages of formation at Boston area biotech venture firm Flagship Pioneering.”
While success always requires a prodigious amount of luck, it’s also clear – especially from this fascinating January 2018 Long Run interview with Moderna CEO Stephane Bancel – how much intentionality and deliberate choice were involved as well.
There was a compelling vision that thoroughly captivated founding VC Noubar Afeyan, subsequently shared by Bancel, who Afeyan recruited from Bancel’s previous role as CEO of French diagnostics company bioMérieux. (Fun fact: Bancel actually started his career as a sales rep for bioMérieux in Asia.)
Of course, not everyone bought into this vision, especially after repeated disappointments, nicely chronicled by STAT here. Many wondered if the perennially-hyped promise of mRNA therapeutics would ever been meaningfully realized. (To be fair, outside of vaccines, which conveniently don’t require chronic dosing, many still worry.)
But it’s not only mRNA vaccines that delivered; as I wrote in the context of JPM2018 (remember JPM?), we’re living through a remarkable moment in biotech, where the promises made decades ago (effective gene therapy, increasingly customized cell therapy, ever more elegant molecular editing) are at last being realized.
Which raises the question: what’s next? Who are the Moderna’s of today? What are the nascent concepts or embryonic startups of today, that will revolutionize medicine tomorrow?
If I was certain of the answer, of course, I would have already founded the company. But I know a few things.
First, there is exceptional and largely unrealized promise that will emerge from the intersection of biopharma and digital/data. Yes, there’s also extraordinary hype and extravagant expectation; in his always-essential year-end review, life science VC Bruce Booth calls out (not unfairly) “AI and machine learning in drug discovery” as the “most prominent” area that’s “over-hyped relative to [its] practical application.”
Yet from all this heat, I’m confident some real light will emerge. Three of the “V’s” associated with big data are plainly abundant in healthcare: volume, velocity, variety. Two others – veracity, value – would seem to be more of a work in progress.
There’s also ever-more powerful computers, and smarter (and perhaps even more ethical) algorithms. Misaligned incentives remain a pervasive problem, especially in healthcare delivery, but the essential opportunities to deliver better medicines more rapidly to the right patients, and to help healthy people remain healthy so they don’t require medicines — remain fundamentally compelling, even if aligning these objectives with durable business models represents an underappreciated, pervasive challenge.
And as for the breathless promises – I’m less worried about them. After all, mRNA vaccines were dismissed as ludicrously overhyped until about, oh, two minutes ago.
A second reason for optimism reflects the lessons we’ve learned about the implementation of emerging technology from successful leaders of innovative biotech companies. In many ways, Bancel may represent the very model of modern integrative CEO, combining the attributes of authentic intellectual curiosity about emerging technology with deep domain expertise in developing approvable drugs.
Bancel, after completing his MBA at Harvard, joined Lilly and deliberately chose to focus on understanding manufacturing (a famously unglamorous, yet, as Bancel had learned at Harvard, absolutely vital function), then worked on resolving a range of regulatory-related corporate challenges, first at Lilly, then [as CEO] at bioMierieux.
All told, Bancel spent years (Long Run listeners will recall) learning the fundamentals of biotech, a grounding ended up positioning him well for what came later.
The point is that Bancel’s success wasn’t driven by a lifelong passion for mRNA technology, but rather by the ability to recognize the potential of the technology, and then to have the wherewithal — operational sophistication plus situational awareness — to gainfully apply it to a relevant problem.
While the successful application of digital and data advances to drug development will similarly require both an appreciation for and a facility with emerging technologies, I would bet on – and invest in – the thesis that success is far more likely to be driven by savvy implementation driven by a deep understanding of the critical business problems to be solved, rather than by whether a particular algorithm is powerful enough to go to 11.
It’s a difficult time to be optimistic, but I couldn’t feel more encouraged by the promising future I see at the intersection of biopharma and digital technology. This vision is inspired by patients, powered by data, and enabled by computation, yet will be realized only by pragmatic implementation, by investors and executives who value but are not distracted by dazzling technology, and maintain a relentless focus on the critical problems constraining the core business.